EXHIBIT 10.11
MANHATTAN ASSOCIATES, LLC
Option Plan
Article I
GENERAL
1.1 PLAN PURPOSE. The purpose of the Manhattan Associates, LLC Option
Plan (the "Plan") is to promote the interests of Manhattan Associates, LLC (the
"Company") by providing for the grant of Options to: (i) Key Employees, in
order to secure and retain employees of outstanding ability by making it
possible to offer them an increased incentive to join or continue in the service
of the Company, and to increase their efforts for its welfare by participating
in the ownership and growth of the Company, (ii) Managers and Consultants, in
order to provide such parties with a stake in the future of the Company that
corresponds to that of the Company's Shareholders, and (iii) such other persons
who need not be Key Employees, Managers, Consultants, or employees of the
Company, but who the Committee determines in its sole discretion are important
to the Company's culture or success.
1.2 DEFINITIONS. Each term set forth in this Section shall have the
meaning set forth opposite such term for purposes of this Plan and, for purposes
of such definitions, the singular shall include the plural and the plural shall
include the singular, and reference to one gender shall include the other
gender.
(a) "Affiliate" means a person or entity that, directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
common control with, the Company;
(b) "Board" means the Board of Managers of the Company;
(c) "Change in Control" means a sale or transfer (other than as
security for the Company's obligations) of title to all of the computer software
as well as the other material assets of the Company having a combined value of
more than ninety percent (90%) of the total value of all the assets of the
Company, as determined on the date of sale or transfer. A Change in Control
shall not be deemed to occur merely upon the conversion of the Company to a
corporation or other entity, whether by contribution of the Company's assets,
merger or otherwise, if upon the conversion the ownership of the Company's
equity interests remains in the hands of those who were Shareholders immediately
preceding the conversion;
(d) "Code" means the Internal Revenue Code of 1986, as amended;
(e) "Committee" means the Compensation Committee of the Board;
(f) "Consultant" means an outside contractor who is not an employee of
the Company and who has rendered valuable service to the Company;
(g) "Continuous Service" means a designated period, following the
grant of an Option, as set forth in the Option Agreement, during which the
Optionee has been on the payroll of the Company performing services for the
Company, a Parent, or a Subsidiary, as determined by the Board;
(h) "Exercise Event" means an event that triggers the right of an
Optionee to exercise the Option, as described in Section 2.1(c);
(i) "Exercise Price" means the price at which a Share subject to an
Option may be purchased upon the exercise of the Option, as set forth in the
Option Agreement pursuant to the provisions of Section 2.1(a);
(j) "Fair Market Value" means, at any time and from time to time, the
quotient of: (a) the fair market value of the Company as of the date
immediately prior to the relevant event, as determined in good faith by the
Board, divided by (b) the total number of Shares outstanding on the applicable
date. In making the determination of the Fair Market Value pursuant to this
Subsection, the Board shall assume that fair market value of the Company is
equal to the amount which would be paid in cash for the purchase of all the
Shares of the Company, as a going concern, by an unaffiliated third party
financial buyer, and may take into account such additional factors as may be
relevant to such valuation, including without limitation, the absence of a
trading market for the Shares, the minority status of the Shares, and such other
facts and circumstances as may be material;
(k) "Initial Public Offering" means the closing of the first
underwritten firm commitment offering of Shares following the declaration of
effectiveness of a registration statement for such Shares by the Securities and
Exchange Commission under the Securities Act of 1933, as amended (excluding any
registration statement solely covering an employee benefit plan or corporate
reorganization);
(l) "Key Employee" means any person in the regular employment of the
Company who is designated a Key Employee by the Committee referred to in Section
1.3, and is or is expected to be primarily responsible for the management,
growth, or supervision of some part or all of the business of the Company. The
power to determine who is and who is not a Key Employee is reserved solely for
the Committee;
(m) "Key Person" means an individual who is not a Key Employee,
Consultant, Manager or employee of the Company, who is determined by the
Committee, in its sole discretion, to be important to the Company's culture or
success;
(n) "Manager" means a member of the Board;
(o) "Operating Agreement" means the Operating Agreement of Manhattan
Associates, LLC, effective as of December 31, 1995, as may be amended from time
to time;
(p) "Option" means an option to purchase Shares pursuant to the terms
of the Plan;
(q) "Option Agreement" means an agreement signed by the Company and
the Optionee evidencing the terms and conditions of the grant of an Option;
(r) "Optionee" means a Key Employee, Consultant, Manager or Key Person
to whom an Option is granted under the Plan;
(s) "Option Repurchase Price" means the price which the Company pays
for the repurchase of any Option, which shall be equal to the Fair Market Value
of Option Shares subject to repurchase, less the Exercise Price for said Shares
set forth in the Option Agreement;
-2-
(t) "Option Repurchase Right" means the right of the Company to
repurchase any or all of the Options of an Optionee, as set forth in Section
2.1(g) of this Plan;
(u) "Share" means an ownership interest in the Company which serves as
a basis for determining a Shareholder's share of the net profits and losses,
distributions of the Company's assets, and voting rights of Shareholders, or, if
the Company is restructured or recapitalized as a corporation, a share of the
common stock of the Company;
(v) "Shareholder" means an owner of Shares;
(w) "Term" means the period during which a particular Option may be
exercised as determined by the Committee and as provided in the Option
Agreement;
(x) "Terminated with Cause" means that an Optionee's relationship with
the Company has been terminated as the result of the Optionee's (i) knowing and
willful misconduct with respect to the business and affairs of the Company; (ii)
material violation of any policy of the Company relating to ethical business
conduct or practices or fiduciary duties; (iii) willful neglect of reasonable
assigned duties or knowing failure to act which adversely affects the business
and affairs of the Company; (iv) material breach of any provision of any written
employment or other agreement between the Company and the Optionee which is not
remedied within seven (7) days after Employee's receipt of notice thereof; (v)
commission of a felony or an illegal act involving moral turpitude or fraud or
the Optionee's dishonesty which may be expected to have a material adverse
effect on the Company; or (vi) failure to comply with directives of an officer
of the Company or the Board of Managers regarding the duties and
responsibilities of the Optionee's employment or other relationship with the
Company, if not remedied within seven (7) days after the Optionee's receipt of
notice thereof;
(y) "Termination Date" means the day on which an Optionee's
relationship with the Company is terminated. The Termination Date of an
Optionee who dies or is disabled shall be the date of death or the date of
disability, as determined by the Committee in its sole discretion. In the
absence of death or disability, the Termination Date of a Key Employee shall be
the last date for which he or she receives a regular wage or salary payment. In
the absence of death or disability, a Consultant's, Manager's or Key Person's
relationship with the Company shall be deemed to terminate as of the Termination
Date determined by the Committee in its sole discretion. Any questions
regarding the fact or date of occurrence of a Termination Date shall be resolved
by the Committee, in its sole judgment;
(z) "Vested" means, with respect to all or a portion of the Shares
subject to an Option, that the Optionee has successfully completed Continuous
Service for the periods set forth in the Option Agreement. Shares subject to an
Option which is Vested (sometimes referred to as "Vested Options") shall be
exercisable by the Optionee in accordance with the provisions of Section 2.1(c).
1.3 ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Committee appointed by the Board consisting of at least two (2) members from the
Board. Subject to the control of the Board and the terms of the Operating
Agreement, the Committee shall have the power to interpret and apply the Plan
and to make regulations for carrying out its purpose. More particularly,
subject to the terms of the Operating Agreement, the Committee shall determine
which Key Employees, Consultants, Managers and Key Persons shall be awarded
Options under the Plan, the number of Shares subject to each Option, the price
per Share under each Option, the Term of each Option, and any restrictions on
the exercise of each Option. Determinations by the Committee under the Plan
(including, without limitation, determinations of the person to receive Options,
the form, amount and timing of such Options, and the terms and provisions
-3-
of such Options and the agreements evidencing same) need not be uniform and may
be made by it selectively among persons who receive, or are eligible to receive,
Options under the Plan, whether or not such persons are similarly situated. In
the event the Board fails or elects not to appoint a Committee, or chooses to
disband or abolish a Committee once appointed, the Board shall administer the
Plan.
1.4 SHARES SUBJECT TO THE PLAN. The total number of Shares that may be
purchased pursuant to Options under the Plan shall not exceed two million five
hundred thousand (2,500,000) Shares. Except as provided in Section 1.7, Shares
subject to the Options which terminate or expire prior to exercise shall be
available for future Options. Shares issued pursuant to the Plan may be either
unissued Shares or Shares which have been reacquired by the Company.
1.5 SHARE ADJUSTMENTS; MERGERS. Notwithstanding Section 1.4, in the event
the outstanding Shares are increased or decreased or changed into or exchanged
for a different number or kind of interest or other securities of the Company or
of any other entity by reason of any merger, sale, consolidation, liquidation,
recapitalization, reclassification, split up, combination, or dividend, the
total number of Shares reserved under the Plan as set forth in Section 1.4 shall
be proportionately and appropriately adjusted by the Committee, but only to the
extent necessary to reflect changes in outstanding Options. If the Company
continues in existence, the number and kind of interests that are subject to any
Option and the option price per unit of such interests shall be proportionately
and appropriately adjusted without any change in the aggregate price to be paid
therefor upon exercise of the Option. If the Company will not remain in
existence or substantially all of its Shares will be purchased by a single
purchaser or group of purchasers acting together, then the Committee may: (i)
declare that all Options shall terminate thirty (30) days after the Committee
gives written notice to all Optionees of their immediate right to exercise all
Options then outstanding (without regard to limitations on exercise otherwise
contained in the Options); (ii) declare that all Options shall terminate thirty
(30) days after the Committee gives written notice to all Optionees of their
immediate right to exercise all vested Options then outstanding (without regard
to limitations on exercise, other than vesting requirements, otherwise contained
in the Options); (iii) notify all Optionees that all Options granted under the
Plan shall apply with appropriate adjustments as determined by the Committee to
the securities of the successor corporation to which holders of the numbers of
Shares subject to such Options would have been entitled; (iv) notify Optionees
that the Company has elected to exercise its Option Repurchase Rights under
Section 2.1(g); or (v) some combination of aspects of (i), (ii), (iii) or (iv).
The determination by the Committee as to the terms of any of the foregoing
adjustments shall be conclusive and binding. Any fractional Shares resulting
from any of the foregoing adjustments under this Section shall be disregarded
and eliminated.
1.6 OPTIONS AND SHARES SUBJECT TO OPERATING AGREEMENT. The grant or
issuance of any Options or Shares pursuant to the Plan, and the terms and
conditions of such Options or Shares, shall be subject to the terms and
conditions of the Operating Agreement applicable to Shares.
1.7 DISSOLUTION OR TERMINATION OF THE COMPANY. In the event the Company
dissolves pursuant to the Georgia Limited Liability Company Act (O.C.G.A. (S)
11-14-100, et seq.), this Plan and all Options granted under the Plan shall
terminate and cease to be effective as of the date of dissolution, and shall be
of no further force or effect. Upon Dissolution, no Optionee shall be entitled
to any rights or benefits, including distributions, with respect to any Options
or Shares granted or issued under the Plan. Notwithstanding the foregoing, an
Option shall not terminate upon the conversion of the Company to a corporation
or other entity, whether by contribution of the Company's assets, merger or
otherwise, if upon the conversion the ownership of the Company's equity
-4-
interests remains in the hands of those who were shareholders immediately
preceding the conversion.
1.8 CHANGE IN CONTROL. Upon the occurrence of a Change in Control, all
Options, whether Vested or non-Vested, shall immediately become fully Vested and
exercisable as set forth in Section 2.1(c).
1.9 NOTIFICATION OF EXERCISE. Options shall be exercised by written
notice directed to the Secretary of the Company at the principal executive
offices of the Company. Such written notice shall be accompanied by the payment
required pursuant to Section 2.1(d).
ARTICLE II
TERMS AND CONDITIONS OF OPTIONS
2.1 GENERAL PROVISIONS REGARDING OPTION AGREEMENTS. All Options shall be
evidenced by Option Agreements in such form as the Committee shall approve from
time to time, and shall contain the following provisions set forth below.
(a) Exercise Price. The Exercise Price of the Option shall be
determined by the Committee at the time the Option is granted.
(b) Term. Each Option granted by the Committee shall have a
designated Term, not to exceed ten (10) years, and the Term shall be described
in the Option Agreement evidencing the Option.
(c) Exercise. An Option shall be exercisable only upon the occurrence
of an Exercise Event, which shall be the earliest to occur of the following:
(1) a Change in Control, at which time all outstanding and unexercised Options
shall be deemed to be fully Vested; (2) the date which is nine (9) years and six
(6) months following the date of the respective Option grant; or (3) to the
extent Vested, upon the occurrence of an Initial Public Offering or whenever
more than fifty percent (50%) of the issued and outstanding Shares are acquired
by persons who are not Shareholders or Affiliates in a single transaction or
series of transactions occurring over a period of thirty (30) consecutive days.
(d) Payment. Payment for Shares as to which an Option is exercised
shall be made in such manner and at such time or times as shall be provided in
the Option Agreement, which may include, in the Committee's sole discretion,
cash, Shares which were previously acquired by the Optionee and held for a
period of not less than six (6) months, cancellation of indebtedness, a
promissory note, or any combination thereof. The Fair Market Value of the
surrendered Shares as of the date of exercise shall be determined in valuing
Shares used in payment for Options.
(e) Termination of Options. An Optionee's Option shall expire and be
of no further force and effect immediately upon the earliest to occur of the
following:
(i) the Termination Date, when the Optionee's employment or other
relationship with the Company has been Terminated with Cause;
(ii) the expiration of the Term;
(iii) the dissolution or liquidation of the Company;
-5-
(iv) the date which is ten (10) years following the date on which
the Option was granted;
(v) the date which is sixty (60) days following the death or
disability of an Optionee (disability to be determined by the Committee in its
sole discretion); or
(vi) the date of Option termination as described by the Committee
in the exercise of the Company's rights pursuant to Section 1.5.
An Option which has not been exercised upon its termination shall be void and
unexercisable
(f) Termination of Employment or Other Relationship with the Company.
Upon the termination of an Optionee's employment or other relationship with the
Company, any Option or unexercised portion of an Option which is not Vested
shall be forfeited and be void and unexercisable. Any Vested Option, and any
unexercised portion of a Vested Option, belonging to an Optionee whose
employment or other relationship with the Company is Terminated with Cause shall
be forfeited immediately upon the Termination Date and shall be void and
unexercisable.
(g) Company's Option Repurchase Rights. As a condition to each grant
of an Option under the Plan, each Optionee grants to the Company the right and
option to purchase the Option granted, at any time prior to an Initial Public
Offering or a Change in Control, at a price equal to the Option Repurchase Price
for all Vested Shares subject to the Option grant. The Company may exercise its
call right under this Subsection at any time by providing written notice to the
Optionee, and the Optionee agrees that, within ten (10) days of receipt of such
notice, Optionee shall deliver to the Company his Option Grant Certificate and
such other documents as may be reasonably requested by the Company in connection
with the exercise of the call right hereunder, at the time and place for closing
set by the Company. The Option Repurchase Price shall be payable, at the option
of the Company or its assignee, (i) by check, (ii) by cancellation of all or a
portion of any outstanding indebtedness of Optionee to the Company or such
assignee, (iii) by delivery of a promissory note of the Company (or assignee)
payable in equal annual installments over a four (4) year period from the date
of repurchase at a per annum interest rate equal to the prime rate as announced
by the Company's principal bank as of the date of the exercise of the Company's
Option Repurchase Right or, if the Company has no principal bank, that rate
announced, as of the date of exercise of the Company's Option Repurchase Right,
by the Wall Street Journal as the prevailing "prime rate" of interest per annum,
or (iv) by any combination of the above.
(h) Termination of Option Repurchase Rights. All Option Repurchase
Rights in favor of the Company as set forth in this Section 2.1 shall terminate
as to any Options upon the first to occur of an Initial Public Offering or a
Change in Control.
(i) Nontransferability. No Option granted under the Plan shall be
transferable. During the lifetime of the Optionee, an Option shall be
exercisable only by the Optionee.
(j) Eligibility. No Key Employee, Key Person, Consultant or Manager
shall have the right to be granted any Option pursuant to the Plan merely as a
result of his or her status as an Key Employee, Key Person, Consultant or
Manager of the Company.
2.2 ADDITIONAL PROVISIONS. Each Option Agreement may contain such other
terms and conditions not inconsistent with the provisions of the Plan or the
Operating Agreement as the Committee may deem appropriate from time to time,
including, but not limited to, a cash award for any federal tax
-6-
liability suffered by the Optionee upon the grant and/o r exercise of the
Option, acceleration of the vesting period, and termination of any unexercised
Option after an acceleration of the vesting period.
ARTICLE III
ADDITIONAL PROVISIONS
3.1 SHAREHOLDER APPROVAL. The Plan will be submitted for the approval of
the Shareholders of the Company at the first annual meeting of Shareholders held
subsequent to the adoption of the Plan, or at a special meeting, whether in
person or via telephone, or by written consent, all as provided in the Operating
Agreement, and in all events within one (1) year of its approval by the Board.
3.2 COMPLIANCE WITH OTHER LAWS AND REGULATIONS. The Plan, the grant and
exercise of Options hereunder, and the obligation of the Company to sell and
deliver Shares under such Options, shall be subject to all applicable Federal
and state laws, rules, and regulations and to such approvals by any government
or regulatory agency as may be required.
3.3 AMENDMENTS. The Board may amend or discontinue the Plan at any
time. Other than as expressly permitted under the Plan or the Option Agreement,
no outstanding Option may be revoked or altered in a manner unfavorable to the
Optionee without the consent of the Optionee.
3.4 NO RIGHTS AS SHAREHOLDER. No Optionee shall have any rights as a
Shareholder with respect to any Share subject to his or her Option prior to the
date of issuance to him or her of a certificate or certificates for such Shares.
3.5 WITHHOLDING. Whenever the Company proposes or is required to issue or
transfer Shares under the Plan, the Company shall have the right to require the
Optionee to remit to the Company an amount sufficient to satisfy any Federal,
state or local withholding tax liability prior to the delivery of any
certificate or certificates for such Shares. Whenever under the Plan payments
are to be made in cash, such payments shall be made net of an amount sufficient
to satisfy any Federal, state, or local withholding tax liability.
3.6 CONTINUED EMPLOYMENT NOT PRESUMED. This Plan and any document
describing this Plan and the grant of any Option hereunder shall not give any
Optionee or other employee a right to employment or continued employment by the
Company or affect the right of the Company to terminate the employment of any
such person with or without cause.
3.7 EFFECTIVE DATE; DURATION. The Plan shall become effective as of
January 1, 1997, subject to Shareholder approval pursuant to Section 3.1, and
shall expire on January 1, 2007. No Options may be granted under the Plan after
January 1, 2007, but Options granted on or before that date may be exercised
according to the terms of the Option Agreements and shall continue to be
governed by and interpreted consistent with the terms hereof.
-7-